The age distribution of business firms

The Institute of Economics will hold a Webinar as part of its Seminar Series on Tuesday, May 12, 2020: Daniele Giachini from the Institute of Economics and EMbeDS of Scuola Superiore Sant'Anna will present the paper: The age distribution of business firms.

Abstract:

In this paper the authors investigate upon the shape and determinants of the age distribution of business firms. By employing a novel comprehensive dataset covering the population of French businesses, they highlight three key stylised facts. First, a relatively good first-order approximation for the age distribution is an exponential law; second, there are however important deviations from this benchmark; third, sectoral heterogeneity is significant. The authors develop and solve a stochastic model of firm dynamics to explain the mechanisms behind these stylised facts. Combined with empirical findings, the model suggests the existence of a long-term decline in entry rates, confirms lower survival probabilities of young firms, and provides a direct way to characterise sectoral stages of industry life-cycles. These findings contribute to the ongoing debate on the role of young firms in economies and have important implications for economic outcomes, notably for employment growth.

The webinar will take place via Microsoft Teams. Please contact the organizers in case of interest in participating.